Which penalty relates specifically to COBRA's reporting and disclosure failures?

• A. Excise taxes
• B. Fines for failing to satisfy COBRA's reporting and disclosure rules
• C. Civil liability
• D. Attorney's fees

Answer: (B)

COBRA imposes a direct monetary consequence for not meeting its reporting and disclosure duties: fines for failing to satisfy those rules. This means when a plan administrator skips or botches the required notices and disclosures about COBRA rights, the specific penalty is a fine assessed for that reporting failure. Other potential penalties—excise taxes target different tax-related violations, civil liability involves damages from broader plan breaches, and attorney’s fees are costs that may be awarded in litigation—do not correspond to the automatic penalty for simply not complying with the reporting and disclosure requirements. So the investor-focused idea is that the automatic penalty for reporting failures under COBRA is fines.